Question

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NEU Portal NLU Online Telephone National Louis Univers.. Search and Update Co. OWA Sarved Help Which of the following scenarios best illustrates a good stakeholder strategy? Multiple Choice Carrvero Inc. ensures that its employees are paid the least in the industry so that its external stakeholders can get the best price. PA Corp. distributes only 40 percent of its annual profit after taxes to shareholders, while the remaining is invested for further research, and distributed among employees and the local community Gen Pharma Corp. ensures that it fully exploits free natural resources, so that most of its profits go to shareholders in the form of dividends. VP Inc. follows a strategy in which maximization of the shareholder's wealth is the primary concern of the managers < Prev 14 of 25 Next >

Answer 1

The correct answer is Option B where PA Corp distributes only 40% of the annual Profit after Taxes to the shareholders. They also invest the remaining amount in R&D, employee appraisals and in Corporate Social Responsibility for local community.

By using the profits for various stakeholders, the firm is following holistic stakeholder approach and working for various stakeholders' benefit, NOT only the investors.